critique sought on this OP on Reddit, thanks in advance

[steve2470]

http://www.reddit.com/r/occupywallstreet/comments/muqzv/wall_of_text_i_work_in_wall_street_and_work_in

*snip*

Hedge funds. These guys are basically the vehicles of choice for ultra-rich people to get into the financial markets, besides family offices and private wealth managers. What are hedge funds? They are funds that have a 1-5 million deposit minimum, cater to the mega-rich, and can invest in anything without regulatory restrictions, use leverage to pump up their exposure by 15x, and pretty much eat up a vast majority of the industry's profits.

These guys invest in EVERYTHING. Instruments you've heard of - stocks, bonds, forwards, futures, currencies, and instruments that you, me, or anyone else have never even heard of, much less know anything about: commodity future swaptions, FRA/OIS swaps, CLOs, exotic future options, p-notes, index/commodity/equity exposures, and a huge array of OTC (over-the-counter) instruments that no regular investor would ever have access to.

Why I bring this up: the financial markets are rigged. 99% of the investing public has access to services such as basic brokerages, 401k/IRA's, mutual funds, pension plans, etc. Some of these services, especially pension funds, will invest into hedge funds, who take an additional 2 and 20 (meaning 2% of assets plus 20% of capital gains).

What this means is that if you go any of the traditional retail routes, you are utterly screwed facing off against the hedge funds.

*snip*

(very long post at the link above)

[MindMover]

1. Your post is hitting the nail right on the head.....

and would encourage you to continue to write about this evil empire....

I have a series 7 and worked in financial services for 10 years and realized the avaricious greed and immorality of too many of the managers and my co-workers.

To my dismay the further continuation and actual acceleration of these practices made possible by our government is tantamount to the wholesale fleecing of America....

When our leaders can condone such practices at the highest levels of our government and associate with such criminality is discouraging to our populace....and further weakens our national ambition towards fairness in the marketplace....

[steve2470]

2. not my post, need to clarify :) just wanted feedback, thanks nt

[Warpy]

3. All of this is quite true but the feeding frenzy isn't going to last forever

The OWS movement has tapped into a great deal of anger below the surface in this country and even the GOP has noticed it. Eventually, the regulations will be tightened up to the point that a lot of the exotic stuff is going to start losing most of its profit generating ability. A transaction tax will put the kibosh on HFT and its ability to suck money out of the system.

BTW, there are smaller funds out there that are doing the same thing but require a much smaller entry fee, $100K-$250K. If you don't mind making money the dirty way, they're for you.

My most fervent hope is that all the greedheads are so deeply invested in these things that when the regulation and taxation driven crash comes, they'll be busted back to being middle class.